Note on Compensation and Incentive Systems

Provides a brief analysis of the issues involved in designing an effective compensation system with a particular focus on incentives. Provides an analytical framework for thinking about compensation. Topics covered include the composition of the salary package, fringe benefits, and training. Incentive analysis discusses the trade-off between incentive and risk, the problem of performance measurement, …

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Designs by Kate: The Power of Direct Sales

Designs by Kate (DBK) sales representatives sell private label jewelry at hosted parties and through online social media channels. He is also responsible for recruiting, training, and managing new salespeople. CEO and Founder Kate Creevey designed the commission plan to encourage salespeople to team up and become leaders on their teams. The strategy was very …

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Discovery Health (B)

A South African health insurance company is developing an affordable coverage solution for a new prescription drug for the treatment of male impotence.

“Golden Leash” Pay for Directors at The Dow Chemical Company

In November 2014, The Dow Chemical Company faced the prospect of a power battle with prominent hedge fund and activist investor Third Point Management. The activist had criticized Dow’s recent performance, pleading for the company to separate to maximize its potential. The activist also suggested that two director candidates join Dow’s board of directors. Third …

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ghSMART, 2008: Pioneering in Professional Services

Geoff Smart, founder and CEO of ghSMART & Co., wanted to make ghSMART the leading performance review company for CEOs and investors. However, he had just received two very bad news: the disappearance of an existing project and the loss of a $ 1 million investment that he thought was already sold. The news raised …

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Verona Group

Are a saleswoman’s struggles her own fault or the result of problematic job design? Anna George works as a salesperson for the Verona Group, a company that designs and sells high-quality women’s clothing. She had worked in sales for another fashion brand for almost 20 years and was highly regarded in the industry. The Verona …

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Growing a Team at LandCare: Excellence in the Field

In October 2018, Mike Bogan, CEO of LandCare, a statewide commercial landscaping company, was concerned about the significant headwinds facing not only LandCare but the entire landscaping industry at the time. When LandCare struggled to hire and retain employees who could prove their legal work status in the United States, LandCare faced fierce competition from …

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